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Questions and Answers
What does the term 'numeraire' refer to in shadow pricing?
What does the term 'numeraire' refer to in shadow pricing?
- The unit of account where values of inputs and outputs are expressed (correct)
- The willingness of consumers to pay for a project
- The taxes imposed on tradable goods
- The total consumption of the economy
In the context of tradability, when is a good/service considered non-tradable?
In the context of tradability, when is a good/service considered non-tradable?
- When it is fully traded with no trade barriers
- When its export price is more than its domestic cost of production
- When it is actually traded due to domestic industry capacity
- When its import price is less than its domestic cost of production (correct)
According to the UNIDO approach, what should be considered when calculating shadow prices related to taxes?
According to the UNIDO approach, what should be considered when calculating shadow prices related to taxes?
- Taxes should be included when a project diverts non-traded inputs or adds to non-traded consumer goods (correct)
- Taxes should always be included regardless of the project's impact on the economy
- Taxes should be excluded when a project increases domestic production by other producers
- Taxes should be excluded for fully traded goods
What source does the UNIDO approach suggest for determining shadow pricing based on the impact of a project on the national economy?
What source does the UNIDO approach suggest for determining shadow pricing based on the impact of a project on the national economy?
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Why are governments of developing countries concerned about the impact of projects on savings and their value?
Why are governments of developing countries concerned about the impact of projects on savings and their value?
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